Women, Men, and Pay: No More Negotiating for Initial Salaries?

The issue of pay disparities between men and women in America is in the spotlight. By all accounts, the Lilly Ledbetter Fair Pay Act will soon become law. I have argued elsewhere that this effort to mitigate the immediate effects of the Supreme Court’s decision last year in Ledbetter v. Goodyear does little to unseat the much deeper and more potentially devastating conceptual shift that the decision represents. But the passage of the Lilly Ledbetter Fair Pay Act—and its prominence during the election—is still remarkable and important and a testament of the current interest in the gender pay gap.

Along with the Fair Pay Act, we can also expect passage of the Paycheck Fairness Act. Section Five of that Act authorizes the Secretary of Labor to establish and carry out a grant program that awards funds for negotiation skills training programs that “empower girls and women.” According to the section, “The training provided through the program shall help girls and women strengthen their negotiation skills to allow the girls and women to obtain higher salaries and rates of compensation that are equal to those paid to similarly-situated male employees.”

Section Five is undoubtedly a response to the substantial body of research that has accumulated over the past decade showing that women are less likely to negotiate than men. Several popular books have been written on the subject (e.g., Women Don’t Ask; Shadow Negotiation). At the Women and the Law section panel at AALS this last week, two of the five panelists spoke about women and negotiation. One described a class being taught exclusively to women in law school that teaches negotiation skills; the other urged women to negotiate, but to do so carefully, since the research also shows that women are penalized when they negotiate (a negotiating woman doesn’t fit the schema of a woman being warm and self-sacrificing rather than business-like and self-promoting). The consistent thread is that women need to “ask”; otherwise, they will obtain a lower starting salary than their male counterparts, who do ask.

I don’t dispute this basic point. I wonder, though, whether we shouldn’t be thinking more about the role of negotiation in all of this.

I’d be interested to hear of any research or literature asking whether it might be possible to pull back on negotiation, at least at certain key moments, such as the setting of initial salaries. I realize that the issue is complex, that negotiation is really an everyday practice rather than a particular-moment practice and that negotiation affects a range of job features as well as salary, but just to simplify: Why not urge employers to move away from negotiation of initial salaries as a way of reducing the disparity in pay between men and women?

Removing negotiation from initial salaries wouldn’t reduce the biases and stereotypes that are also likely to fuel lower salary offers to women (Ian Ayres’ research on car sales suggests as much), but it might reduce some of the disparity in pay by eliminating the discrimination associated with negotiation, including the penalty that women suffer when they do ask and the penalty that they suffer when they don’t.

Do you seriously not understand that employers compete for employees just like employees compete for jobs? And that to lure a desirable job candidate, employers routinely offer better terms than a candidate would have gotten elsewhere? Have you honestly not noticed that employees come in a great variety of skills, abilities, experiences, educational backgrounds, capacities to generate business, willingness to work on undesirable schedules and tolerate undesirable assignments, etc etc etc, all of which gets incorporated into their salaries? This goes even for low-level employees like secretaries, paralegals, nannies, seamstresses, and research assistants, some of whom are simply dramatically better than others, which an experienced hiring manager can tell from a combination of a resume, references, and an interview. Equal pay in such circumstances means undercompensation of the best and overcompensation of the worst — not an attractive proposition.

Well, it is kind of hard to envision the non-negotiation system you propose while keeping the market functioning. We typically have price-taking with relatively fungible goods and lots of buyers and sellers (commodities, retail goods); and we typically have negotiation when the market is for a unique good with few buyers and sellers (houses). Now, some jobs are relatively fungible, where the workers are just cogs and you could have employers set the initial price with no counter-offers (e.g. first year big firm associates). But not all jobs are like that, and it seems problematic to disadvantage the best workers by taking away their ability to negotiate a higher salary.

Really interesting post. Another possible way to combat the disparity would be greater transparency of salaries. If employers agreed to post the salaries of positions, say in a range, then individual female employees may feel more justifying in asking for equal pay.